The old adage "less is more" has seemingly taken on new meaning for money manager Globalt Inc. of Atlanta. This year, the firm known for its management of stocks of U.S. companies with sizable foreign exposure, began offering a new twist. It's called the "20 Best" Concentrated Portfolio, and it's a distilled version of its familiar style.
With this new strategy, Globalt picks about 20 of the most timely stock investments from its equity universe. These would be seen as world-class market leaders whose stock provides relative value. According to Globalt, market leadership has been steadily narrowing over the last several years. Thus, Globalt expects its "20 Best" portfolio to outperform by honing in on a limited number of choice stocks in various sectors. Some stock holdings at the moment include: Applied Materials, American Express Co., Bristol-Myers Squibb Co., American International Group and Cisco Systems.
Of course, this limited portfolio could swing down as well as up. As Mr. Allen concedes, it "typically amplifies returns up or down. But we are calculating that, over time, our analysis will be correct and we will have more up amplitude than down," and the portfolio will outperform "the benchmark, which is typically the Russell 1000 Growth index or the S&P 500," he said.
Although the product debuted Jan. 1, Globalt began actively marketing it in the third quarter. Mr. Allen said this may be most attractive to "relatively large investors who would view this (as part of) multiple manager arrangements." It also could be married "to a portfolio whose core is indexed to try to provide higher alpha against that indexed core."